Green v. Opm

Case: 19-2376 Document: 45 Page: 1 Filed: 07/27/2020
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
NATALIE GREEN,
Petitioner
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent
______________________
2019-2376
______________________
Petition for review of the Merit Systems Protection
Board in No. CH-0845-18-0576-I-1.
______________________
Decided: July 27, 2020
______________________
NATALIE GREEN, Maywood, IL, pro se.
SONIA MARIE ORFIELD, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, for respondent. Also represented by ETHAN P.
DAVIS, REGINALD THOMAS BLADES, JR., ROBERT EDWARD
KIRSCHMAN, JR.; ROXANN SAMANTHA JOHNSON, Office of
General Counsel, United States Office of Personnel Man-
agement, Washington, DC.
______________________
Case: 19-2376 Document: 45 Page: 2 Filed: 07/27/2020
2 GREEN v. OPM
PER CURIAM.
Natalie Green petitions for review of a Merit Systems
Protection Board (“Board”) decision that affirmed an Office
of Personnel Management (“OPM”) decision terminating
Ms. Green’s disability annuity payments and finding that
she owed the government for overpayments she received
after the termination’s effective date. We affirm.
I
A
In May 2003, Ms. Green retired on disability under the
Federal Employees’ Retirement System (“FERS”) from a
position as a Machine Operator with the U.S. Postal Ser-
vice.
In 2016, Ms. Green worked as a paralegal for a federal
service contractor. She was under the age of 60 throughout
2016. Under 5 U.S.C. § 8455(a)(2), if a person receiving a
FERS disability annuity has his or her “earning capacity”
restored before turning 60, payment of the annuity termi-
nates after the end of the calendar year in which earning
capacity was restored. See 5 C.F.R. § 844.402(a) (setting
the termination date at June 30 following that calendar
year). Earning capacity is deemed restored “if in any cal-
endar year the income of the annuitant from wages or self-
employment or both equals at least 80 percent of the cur-
rent rate of pay of the position occupied immediately before
retirement.” 5 U.S.C. § 8455(a)(2); see 5 C.F.R. § 844.402
(implementing regulation).
On January 23, 2018, OPM sent Ms. Green a letter
stating that her 2016 earned income indicated that her
earning capacity may have been restored, and therefore
her disability annuity payments might be terminated
(along with her federal employee health benefits). SApp’x
Case: 19-2376 Document: 45 Page: 3 Filed: 07/27/2020
GREEN v. OPM 3
75–76. 1 OPM noted that the 2016 rate of basic pay for the
position she occupied immediately before retirement was
$58,231 (80 percent of which was $46,584). SApp’x 75.
OPM also noted that the Social Security Administration
had reported to OPM that Ms. Green’s earned income for
2016 was $48,955, which exceeded that 80 percent limita-
tion. Id. (citing 5 C.F.R. § 844.402).
OPM sent additional correspondence to Ms. Green, in-
cluding an April 17, 2018 letter stating that she owed
$12,664.22 for overpayments she received, and an April 19,
2018 letter stating that her disability annuity terminated
effective June 30, 2017, and that her federal employee
health benefit enrollment must also be terminated. OPM
ultimately issued a final decision on August 16, 2018, reit-
erating its previous conclusions that: (1) Ms. Green’s 2016
earned income exceeded the relevant 80 percent limitation,
thus causing her disability annuity to terminate effective
July 1, 2017; and (2) Ms. Green owed the government
$12,664.22 from overpayments she received while the an-
nuity should have been terminated. 2 SApp’x 39–42.
B
Ms. Green appealed OPM’s final decision to the Board.
An administrative judge (“AJ”) issued an initial decision
affirming OPM. The AJ noted that it was undisputed that
(1) Ms. Green reported her 2016 income to the IRS as
$48,955; (2) the 2016 base salary for the position she occu-
pied immediately before retirement was $58,231; and
1 Citations to “App’x” and “SApp’x” refer to Peti-
tioner Ms. Green’s Appendix and Respondent OPM’s Sup-
plemental Appendix, respectively.
2 Although OPM’s final decision set forth the effec-
tive date of termination as July 1, 2017 (as opposed to the
previously communicated June 30, 2017 date), OPM’s cal-
culation of what Ms. Green owed remained at $12,664.22.
Case: 19-2376 Document: 45 Page: 4 Filed: 07/27/2020
4 GREEN v. OPM
(3) the $48,955 she reported to the IRS exceeded 80 percent
of that base salary, which was $46,584.80. SApp’x 6.
Ms. Green argued that her $48,955 reported income
should be reduced by the amount of health-and-welfare
benefit payments she received from her employer, which
would leave her with a 2016 earned income of $43,942.19—
below the 80 percent limitation. 3 SApp’x 6. The AJ noted
Ms. Green’s statement that her employer paid her a rate of
$21.05 per hour, plus a health-and-welfare benefit rate of
$4.02 per hour. SApp’x 7; see App’x 97. The AJ further
observed that, while normally these health-and-welfare
benefit payments would be reduced by the cost of any ac-
tual benefits elected by the employee or provided by the
employer, Ms. Green “did not elect to receive any benefit
from [her employer] because she was receiving health and
welfare benefits from OPM.” SApp’x 7; see App’x 97.
In considering Ms. Green’s argument that the health-
and-welfare benefit payments she received from her em-
ployer should be deducted from her income for purposes of
determining her earning capacity, the AJ initially noted
that OPM’s relevant implementing regulation, 5 C.F.R.
§ 844.402, “does not define ‘earning capacity’ beyond stat-
ing that it is demonstrated by an annuitant’s ability to earn
post-retirement income in exchange for personal services
or work product.” SApp’x 7.
The AJ then referred to the analogous disability-annu-
ity regulation for the Civil Service Retirement System
(“CSRS”), which she found instructive. That CSRS regula-
tion generally excludes “[m]edical or hospitalization health
benefit plans” from the calculation of earning capacity, but
3 The AJ noted that Ms. Green’s federal service con-
tractor employer was obligated to provide this benefit or
the cash equivalent thereof. SApp’x 6–7 (citing 41 U.S.C.
§ 6703(2)).
Case: 19-2376 Document: 45 Page: 5 Filed: 07/27/2020
GREEN v. OPM 5
not if “the employee had the opportunity (whether exer-
cised or not) to elect to receive the cash value . . . of the
employer-provided amount or service.” See 5 C.F.R.
§ 831.1209(d)(3)(ii), (d)(4)(ii); see also SApp’x 7–8. The AJ
reasoned that, under this regulation, although an em-
ployer’s payments to a healthcare provider might not con-
stitute income, payments made to the employee in lieu of
healthcare coverage would. SApp’x 8. Finding that Ms.
Green had supplied no authority for not including as in-
come the payments she received in lieu of health-and-wel-
fare benefits, the AJ applied similar reasoning to conclude
that those payments should count as income for purposes
of determining Ms. Green’s earning capacity under the
FERS regulation. See SApp’x 9–10. Separately, the AJ de-
termined that Ms. Green failed to show entitlement to a
waiver from the government’s recovery of the overpay-
ments she received and that the record did not support ad-
justing the overpayment repayment schedule.
The AJ’s initial decision became the Board’s final deci-
sion. See 5 C.F.R. § 1201.113. Ms. Green timely petitioned
for review of that decision. We have jurisdiction under
28 U.S.C. § 1295(a)(9).
II
A
Our review of Board decisions is limited. See 5 U.S.C.
§ 7703(c). We review a decision for whether it is “(1) arbi-
trary, capricious, an abuse of discretion, or otherwise not
in accordance with law; (2) obtained without procedures re-
quired by law, rule, or regulation having been followed; or
(3) unsupported by substantial evidence.” Id.; see also
Grover v. Office of Pers. Mgmt., 828 F.3d 1378, 1382 (Fed.
Cir. 2016). Substantial evidence is “such relevant evidence
as a reasonable individual might accept as adequate to sup-
port a conclusion.” Belanger v. Office of Pers. Mgmt., 1 F.3d
1223, 1227 (Fed. Cir. 1993).
Case: 19-2376 Document: 45 Page: 6 Filed: 07/27/2020
6 GREEN v. OPM
Ms. Green challenges the Board’s decision to include as
income the health-and-welfare benefit payments she re-
ceived from her employer for purposes of determining her
earning capacity. See, e.g., Petitioner’s Informal Br. 4. We
also construe her opening brief as challenging the Board’s
determination that she was entitled neither to a waiver
from the government’s recovery of overpayments, nor to an
adjustment of the overpayment repayment schedule. See
id. at 4–5, 20. We address these issues in turn.
B
The operative OPM regulation provides, in a subsec-
tion titled “Income,” that “[e]arning capacity for the pur-
poses of this section is demonstrated by an annuitant’s
ability to earn post-retirement income in exchange for per-
sonal services or a work product.” 5 C.F.R. § 844.402. OPM
interpreted this regulation to include as income the health-
and-welfare benefit payments Ms. Green received from her
employer. “As a general rule, we must defer to an agency’s
interpretations of the regulations it promulgates, as long
as the regulation is ambiguous and the agency’s interpre-
tation is neither plainly erroneous nor inconsistent with
the regulation.” Gose v. U.S. Postal Serv., 451 F.3d 831,
836 (Fed. Cir. 2006). We therefore consider whether the
regulation is ambiguous on the particular issue here—
whether these health-and-welfare benefit payments qual-
ify as income for purposes of determining earning capac-
ity—and, if it is ambiguous, whether OPM’s interpretation
to include such payments as income is plainly erroneous or
inconsistent with the regulation.
The Board found that the text of 5 C.F.R. § 844.402
does not, by itself, resolve the issue of whether these
health-and-welfare benefit payments qualify as “income in
exchange for personal services or work product” for pur-
poses of determining earning capacity. See SApp’x 7–9. We
likewise conclude that, although the regulation clarifies
some aspects of what qualifies as income for purposes of
Case: 19-2376 Document: 45 Page: 7 Filed: 07/27/2020
GREEN v. OPM 7
determining earning capacity, see 5 C.F.R. § 844.402(c)(1)–
(3), the regulation’s text alone does not resolve the specific
question of whether these health-and-welfare benefit pay-
ments so qualify.
Having concluded that the regulation is ambiguous on
this point, we next consider whether OPM’s interpretation
of the regulation to include these health-and-welfare bene-
fit payments as income is plainly erroneous or inconsistent
with the regulation. See Chase Bank USA, N.A. v. McCoy,
562 U.S. 195, 207–08 (2011) (after finding the regulation
ambiguous on the question presented, looking to the
agency’s interpretation of its own regulation for guidance
and deferring to that interpretation unless plainly errone-
ous or inconsistent with the regulation). We cannot say
that it is.
As the Board observed, the analogous CSRS disability-
annuity provision supports this interpretation. In that
context, although medical benefits are generally excluded
from earning-capacity income, they are not excluded where
the employee has an opportunity to receive the cash value
of those benefits. See SApp’x 7–8 (discussing 5 C.F.R.
§ 831.1209(d)(3)–(4)). Similarly, OPM notes that while it
does not include an employee’s health insurance benefits in
calculating “income” for purposes of determining earning
capacity, it does do so when those benefits are converted to
payments from the employer to the employee, as they were
here. See Respondent’s Informal Br. 9. Ms. Green has not
demonstrated—nor can we conclude—that treating these
cash payments as income for purposes of determining earn-
ing capacity is plainly erroneous or inconsistent with the
regulation. See Gose, 451 F.3d at 837 (explaining that we
defer to an agency’s interpretations of its own regulations
“because the agency, as the promulgator of the regulation,
is particularly well suited to speak to its original intent in
adopting the regulation”).
Case: 19-2376 Document: 45 Page: 8 Filed: 07/27/2020
8 GREEN v. OPM
C
The Board next considered whether Ms. Green was en-
titled to a waiver from the government’s recovery of the
overpayments she received. 4 SApp’x10–13. The Board ob-
served that recovery “will be waived when the annuitant is
without fault and recovery would be against equity and
good conscience.” SApp’x 10 (citing 5 U.S.C. § 8470(b)).
But, as the Board correctly noted, it was Ms. Green’s bur-
den to establish her entitlement to a waiver by substantial
evidence. SApp’x 11 (citing 5 C.F.R. § 845.307).
The Board found that, although Ms. Green was not at
fault for creating the overpayment, she had “failed to pro-
vide evidence that recovery would be against equity and
good conscience.” SApp’x 12. The Board considered Ms.
Green’s evidence concerning her mortgage and take-home
pay but found no reason to find that OPM’s proposed re-
payment schedule would constitute a financial hardship.
SApp’x 12–13. The Board similarly found no evidence upon
which it could assess whether Ms. Green was entitled to an
adjustment in the repayment schedule. SApp’x 13. On re-
view, Ms. Green has not demonstrated that the Board’s
waiver and adjustment decisions lacked substantial evi-
dence or were otherwise arbitrary and capricious.
III
We have considered Ms. Green’s remaining arguments
but find them unpersuasive. For the foregoing reasons, we
affirm the Board’s decision.
AFFIRMED
4 The Board found that OPM showed by preponder-
ant evidence that Ms. Green did, in fact, receive overpay-
ments following the date her disability annuities should
have terminated. SApp’x 10.
Case: 19-2376 Document: 45 Page: 9 Filed: 07/27/2020
GREEN v. OPM 9
COSTS
The parties shall bear their own costs.